Wheeler's Corner 08 21st March 2013

Connecting Citizens Who Care

Would you buy a specific brand of four wheel drive utility because you saw a really old ex-All back [Colin Meads] dump a load of fence posts using that brand? Would you buy a life insurance policy because a deeply religious ex-All Black suggested they were trustworthy? What about taking a quick loan from ‘Instant finance’ because an ex Warriors half-back [Stacy Jones] suggested that you could solve all your financial problems by doing so?

What about investing your retirement savings with ‘Lombard Finance and savings’ because Sir Douglas Graham [National] and Bill Jeffries [Labour] were directors of that esteemed company? Were you amongst the hundreds if not thousands who lost millions when Lombard went belly up?

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Dame Jeeny Shipley

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Would you have considered contracting Mainzeal to build your next home or building if you knew that ex-PM Jenny Shipley [National] was the chairperson? I mean shouldn’t we ask, what does Jenny Shipley actually know about the construction business, in fact what does she actually know about business in general.

We all are aware that both Sir Douglas Graham and Bill Jefferies are awaiting sentencing because they misled investors and that Dame Jenny Shipley conveniently walked away from Mainzeal just three weeks before they went bust…owing around a billion dollars to unpaid creditors…and to make matters worse the very same Dame Jenny Shipley is the chair of state-owned enterprise Genesis Energy, so is it safe for us to presume that Genesis Energy is at risk.

What skills, if any, did any of the above people have for the roles given them on a plate? Did they actually have any skills at all or did they simply have a public image that others thought could help sell what ever product was on offer. Or was it simply just public relations hype or jobs for the boy’s and girls? The Listener had this to say on the subject:

“Trophy Directors:

Retired politicians can come a terrible cropper when they accept appointments to company boards. Just ask former Cabinet ministers Sir Douglas Graham and Bill Jeffries, both convicted last year of misleading investors while serving on the board of Lombard Finance and Investments. More recently, the reputation of former Prime Minister Dame Jenny Shipley took a substantial hit with the failure of the big construction company Mainzeal, whose board she had chaired. Why ex-politicians are offered such appointments, even when they have no relevant business experience is no mystery. As Auckland investment commentator Brian Gaynor explained to the Listener, a former prime minister or Cabinet minister is perceived as bringing an aura of credibility and respectability to a board. They may not realise it, but some boardroom appointees are shoulder-tapped not for their perceived ability but purely for their name; hence the term “trophy director”. Quote ends.

When you couple this obvious behaviour to patsy but well paying jobs for mates… it’s not hard to make the connection between performance and skill shortages by board members or chairs to now ask, is this the reason why Solid Energy, Lombard’s and heaps of other companies went belly up or fell foul of the law..

What were the directors of state-owned enterprise Solid Energy doing while the company amassed debts of $389 million? It would appear that they were sitting on their backsides collecting millions and actually doing little. And these are the people that the Nat’s simply give a free hand to spend taxpayer’s money willy-nilly and get knighted while doing so. This [once again] from the Listener who managed to stop defending the national government for a moment or two:

“Solid Energy chairman Mark Ford appeared before a parliamentary select committee this week to explain how the SOE, once a star performer in the public sector, was now on the critical list.

They were also curious to know why bonuses totaling $23 million were paid to chief executive Don Elder [pictured] and top managers when Solid Energy was evidently in freefall.

MPs also grilled former Prime Minister Dame Jenny Shipley about her involvement in the construction company Mainzeal, which collapsed only weeks after she resigned as chairwoman.

Labour MP Clayton Cosgrove was keen to know whether Shipley’s role at Mainzeal might damage the reputation of state-owned enterprise Genesis Energy, which she also chairs.

Mighty River Power was on the mat too, especially when it emerged during select committee hearings that directors were being paid $1200 a day as the company prepares for its flotation on the stock exchange.

It was a rare instance of directors being subjected to close public scrutiny. More often, they fly below the public’s radar. But as the latest issue of the Listener points out, directors are the “last men standing” – the ones who must carry the can – when companies fail”. Quote ends.

The Chair of Mighty River Power Joan Withers [pictured] also has her problems; she is a defendant in a civil class action against Feltex Carpets brought by investors in relation to Feltex’s IPO and Mighty River Power is the first of the governments vital sell off’s as it desperately attempts to replace its cash flow after giving away millions in tax cuts for the rich [people like Withers, Elder, Key, Joyce etc] and handing over millions to Warner Brothers and Peter Jackson and his various companies. Goldman Sachs is advising Australian investors about the MRP sell off…and when Goldman Sachs looks at anything you know there is easy money to be made by those with insider knowledge. Goldman Sachs has often breached US financial regulations / laws; will they do the same here?

The Prime Minister John Key has had a rough couple of weeks, his ability to pay teachers correctly has reached crisis point and they are planning strike action and who can blame them…I mean would you work for nothing? The boss of Solid Energy wouldn’t that’s for sure.

Solid Energy has proved to be anything but solid and is in melt-down but is still paying its departed CEO 1.3 million dollars per year after sacking hundreds of miners and other front line staff. And while he was away having cups of tea with drug lords his Minister of Education [Parata] was hiding and his Minister of Everything [Joyce] has proven to be a draft-horse rather than a unicorn. Poverty and unemployment is growing at expanding rates and around a thousand Kiwis’ per week are heading off-shore.

And we now have the latest poll that shows that citizens want Warner Brothers to pay back the 65 million dollars that he handed over to them, and much to National’s shame…

The Mana Movement is introducing a ‘Feed the Children’ private members bill to the house shortly because they are sick of the government doing nothing in the fight against poverty. If just a fraction of Warner Brothers 65 million was used to fight poverty it would make a huge difference for those at the bottom of the heap, the children of New Zealand.

2.

Jenny Shipley’s history [edited] since departing parliament: From Wikipedia…

She was a school teacher.

She appeared on an episode of the television reality/travel show Intrepid Journeys where she visited Namibia.[5] She later started a charity to help a school she came across as part of that trip.[6]

According to Companies Office records, Jack Chen, Jenny Shipley and another investor founded a business together in 2004 called New Zealand Pure & Natural. Mr Chen quit as a director a year later but only quit his shareholding in 2010.[9] Mr Chen was instrumental in promoting the 'Chinese Business Roundtable Council' in NZ,[10] and set up a new political party in NZ, before being forced to resign due to fraud & corruption charges being laid in Hong Kong. [9][11][12][13][14]

In 2010 the China Construction Bank agreed to help finance a proposal by May Wang [also known as Hao May] & Jack Chen [also known as Chen Keen] to invest in the New Zealand dairy industry[9] by taking over the Crafar Farms.[15]

In December 2012 Shipley resigned from the board of directors of Mainzeal Property & Construction which later went into receivership on 6 February 2013. At mid-day on 5 February 2013 she was one of four independent directors who resigned from the board of Mainzeal Group Limited.[19]. Both Mainzeal Property & Construction (MPCL) and Mainzeal Group Limited are part of the Richina group, controlled & majority owned by Yan Ci Lang (Richard Yan). [20][21][22][23]